Single-Member LLC vs S Corp: the most common path U.S. owners take.

Yes. A single-member LLC can elect S Corporation federal tax treatment by filing IRS Form 2553. The election is generally effective for the tax year in which it is filed and all subsequent years until revoked. The LLC keeps its state-level liability protection; the federal tax side mirrors an S Corporation.

The IRS treats a single-member LLC as a 'disregarded entity' — taxed as a sole proprietor. The owner reports the LLC's net profit on Schedule C and pays self-employment tax via Schedule SE. There is no separate federal tax return for the LLC itself.

When net profit is consistently $60K+ and a defensible 'reasonable salary' is materially lower than the total profit, the federal payroll-tax savings usually exceed the added bookkeeping and payroll costs. Below that range, the $1,200/yr modeled admin overhead often wipes out the savings.

The LLC already needs its own EIN once formed (the IRS does not let you use your SSN for an LLC that elects S Corp status). The S-Corp election itself does not require a new EIN — Form 2553 is filed with the LLC's existing EIN.

An S-Corp owner-employee must take a W-2 salary that the IRS considers reasonable for the services performed. The IRS does not publish a formula. Reasonable compensation depends on the owner's duties, experience, industry, and geographic location. Setting the salary too low invites the IRS to reclassify distributions as wages.

No — the federal income tax on net earnings is the same on both sides. The LLC owner pays ordinary income tax on the net profit (Schedule C → Form 1040). The S-Corp owner pays ordinary income tax on the salary (W-2 → Form 1040) and on the distribution (Schedule K-1 → Form 1040). The difference is in the 15.3% self-employment / FICA tax layer, which the S-Corp reduces.

Yes. Revocation requires majority shareholder consent and IRS filing. The entity reverts to default LLC taxation (disregarded entity for single-member). You can re-elect after 5 years, but the IRS must consent for earlier re-election. State-level revocation filings may also be required.

Section 199A (the QBI deduction) is available to S Corporations and to default-taxed LLCs alike. The election does not eliminate QBI eligibility, but it does change the W-2 wage / UBIA components of the §199A limitations, which can materially affect the deduction at higher income levels.

Both an LLC owner (Schedule C) and an S-Corp owner-employee can deduct self-employed health insurance premiums, but the deduction is capped by net SE earnings / W-2 wages. SEP-IRA, Solo 401(k), and SIMPLE IRA contribution limits also differ between the two structures. These are not modeled in the BizTaxMetrics calculator.

Generally no. Most advisors recommend starting as a default LLC and electing S-Corp status only after you have at least one full year of stable, defensible profit. Electing in year one adds complexity before you know whether the business will sustain the profit level that justifies the election.